Magazine

Commentary: Land of Opportunity?

December 08, 2002

The numbers are still small. Against a population of 1.3 billion, they are downright minuscule. But they are rising by the day. Thousands of Japanese in Dalian. A hundred thousand Koreans in the northeast. At least a half-million Taiwanese and who knows how many from Hong Kong. All have moved to China, the most populated country on earth, in search of new opportunities.

It's way too early to know what this trend means for the future of Asia--or the rest of the world. After all, China is hardly an immigrant nation. It's a collection of 55 ethnic groups dominated by the Han people but held together culturally by a powerful army and one-party rule. And even though many Taiwanese have become transplanted mainlanders, the Koreans, Japanese, and other Asians who are streaming into China are still expats there to do business. Foreigners still tend to cluster in enclaves.

Yet the star power of China as a place both to study and do business is suddenly outstripping all expectations. Skilled workers in Japan, a country with an average income level dozens of times that of China's, are lining up for assignments at mainland companies. One Japanese staffing firm, General Engineering, is recruiting Japanese managers aged 30 to 75 to assist Chinese startups, including 500 clients in Beijing alone. In the past two years, the number of students from Korea studying in universities across the Yellow Sea went from 9,200 to 16,300, and 280 flights connect Korea and China every week, up from 215 a year ago. Extrapolate those figures just a bit, and millions of foreigners could be working and living in China by the end of the decade.

This influx of foreigners--which includes mainlanders returning from the U.S. for good--shows that the integration underway with Hong Kong and Taiwan is also starting to reshape the economic geography of the entire Pacific Rim. While attention focuses on the $50 billion in foreign investment that pours into China annually, a more subtle but equally important barometer of China's promise is the huge amount of brainpower it pulls in from the region.

China's allure gives the lie to an idea still held by many in the West--that the mainland is a monolithic, xenophobic society out to go it alone. Indeed, despite its repressiveness, there is a curious porousness and openness in China. The country is becoming a much more inviting place for foreigners with the requisite skills than Japan and Korea were at this stage of development. And after joining the World Trade Organization, China is basically entrusting the direction of whole industries--including cars, semiconductors and pharmaceuticals--to multinationals.

There's an interesting symmetry between this more flexible China and America. True, China is not about to open its doors to massive immigration. But like America, it is learning to tap the talents of ambitious and gifted people from abroad. If China learns to protect intellectual property and respect personal freedoms, there's no reason not to expect that cities such as Shanghai, Shenzhen, and Qingdao will develop Silicon Valleys of their own over time. In contrast, Korea, Japan, and Taiwan never benefited from foreign talent and failed to became international centers of innovation.

Of course, China remains iron fisted in many respects and it is woefully poverty-stricken. Hundreds of millions of poor farmers haven't benefited much from the new prosperity of Southern China. They, along with millions of laid-off factory workers, have the power to generate a backlash against this new open economy. As savvy immigrant bosses and investors move into these regions looking for cheap labor, there will be a test of wills.

But for Asians striving to get into Chinese universities, for the newly minted wealthy from Silicon Valley, and for adventurous Korean and Japanese, the opportunities that China offers outweigh the risks. China also seems to be getting more comfortable with the outside world. Just a few years ago, Beijing was making bellicose threats against Taiwan, lashing out angrily at every perceived slight from Japan, and falling into one crisis after another with the U.S. Before it signed a WTO agreement, Beijing sullenly demanded protection for all kinds of industries. Now, China itself is pushing for free trade throughout Asia. Will there be backsliding? Of course. But a China on course to join the world as the world streams into China is a very good sign.